• ZIOC revises its $1.9 billion investment plan to produce low-carbon iron pellets.
• Metallurgical tests confirm ability to produce DRI-grade concentrate for green steel.
• Project’s net present value rises 37%, operating costs cut to $27 per tonne.

The global steel industry contributes around 7% of greenhouse gas emissions annually, making it one of the world's most polluting sectors. In response, iron ore producers seek to reduce emissions and seize opportunities created by the energy transition.

On August 11, Zanaga Iron Ore Company (ZIOC) announced it would revise the development plan for its Zanaga iron ore project in the Republic of Congo. The company will update its initial $1.9 billion investment plan to focus on producing an iron ore concentrate designed for low-carbon iron pellet manufacturing from the future mine.

Earlier in the year, ZIOC conducted metallurgical tests which confirmed Zanaga’s ability to produce a highly enriched iron concentrate needed for Direct Reduced Iron (DRI). DRI is a process that creates metallic iron with low emissions and is essential for manufacturing green steel.

ZIOC aims to optimize Zanaga’s operating strategy and economic model with this new plan. The company already reports a 37% increase in the project's net present value (NPV). It also raised its internal rate of return (IRR) slightly to 26.7%, up from 26.2% in the revised pre-feasibility study published in April 2024. Meanwhile, operating costs decreased from $31.5 per tonne to $27 per tonne.

These improvements come partly from the higher price premium ZIOC hopes to achieve with the DRI-grade iron produced at Zanaga. Although DRI-grade materials currently make up only about 7% of metallic raw materials used in steelmaking, this share is expected to grow as the industry shifts toward lower emissions. The steel industry’s decarbonization strategy makes DRI a key growth area.

CRU Research predicts that “DRI will become one of the fastest growing commodities in the steel value chain.” ZIOC plans to capitalize on this trend, relying on Zanaga’s capacity to produce improved products tailored to the expanding low-emission DRI market, said CEO Martin Knauth.

ZIOC has not announced a timetable for publishing the new development plan under preparation. However, it expects to update both initial capital and operating costs by the end of 2025. The Zanaga project plans to produce 12 million tonnes of iron ore annually in its first phase, ramping up eventually to 30 million tonnes.

Aurel S. Houenou